by Dana Halawi
BEIRUT, Dec. 12 (Xinhua) -- Economists say that the salary scale approved by Lebanon President Michel Aoun in public sector should be preceded by study over its costs.
In August 2017, Aoun approved wage increase for public sector employees which was estimated to cost some 800 U.S. million dollars annually.
However, economists say that the cost of the salary scale was underestimated.
"The salary scale was not properly studied to assess its real cost. Politicians accelerated it in a bid to create momentum for their candidacy ahead of parliamentary elections," Nassib Ghobril, head of the economic research department at Byblos Bank, told Xinhua.
Ghobril said the real cost of the salary scale reached 1.8 U.S. billion dollars yearly instead of 800 U.S. million dollars estimated by Lebanese officials.
Ghobril's views were echoed by another economist Ghazi Wazne.
"The government does not only underestimate the cost of the salary scale but also did not do a proper study of its revenues in 2017. The government generated only 600 U.S. million dollars in revenues last year instead of an estimated 1.24 U.S. billion dollars," Wazne said.
Layal Mansour, a researcher at the American University of Beirut, said that the decision to approve salary scale without referring to any economic study is a very bad step.
"Also, there is no doubt that the increase in wages for the public sector's employees only which constitute 50 percent of total Lebanese employees is a bad step too. The salary scale led to an increase in inflation and all Lebanese were impacted by this inflation while only 50 percent of employees, who are the employees of the public sector, have maintained their purchasing power and were protected against this inflation," explained Mansour.
Economic bodies in Lebanon escalated lately against the salary scale calling upon the government to remove or postpone it due to its contribution to further increasing the 83 U.S. billion dollars public debt.
This prompted the General Labor Union to fire back at economic bodies saying that the public debt was not a result of the salary scale but a natural result of the lack in proper policies by the government over the past years.
Economists agreed that the salary scale cannot be removed as it was approved with a law but they advised the government to undertake major necessary reforms to generate more revenues and cover the cost of the wage increase.
